Türkiye’s investment funds soar amid inflation measures
In response to inflation control measures and strict monetary policies, Türkiye’s real-value Turkish lira policy has increased domestic investments in Turkish lira-denominated assets.
Investors unable to find attractive interest rates in Turkish lira deposits have turned to investment funds.
What happened:
- Rise in investment funds: As of August 2024, the number of individuals investing in Turkish investment funds surged by 1.173 million, reaching 5.227 million. These funds’ portfolio sizes skyrocketed from ₺1.44 trillion (approximately $42.3 billion) to ₺3.6 trillion (approximately $105.7 billion) in a year.
- Investor preferences shift: In response to inflation control and strict monetary policies, Turkish investors are switching from TL deposits to investment funds because of insufficient interest rates in traditional deposits.
Date | Number of Fund Investors | Portfolio Size (₺) | Portfolio Size (USD) |
---|---|---|---|
March 2023 | 3,711,863 | ₺932.5 billion | ~$27.4 billion |
June 2023 | 3,875,515 | ₺1.136 trillion | ~$33.8 billion |
August 2023 | 4,053,921 | ₺1.444 trillion | ~$42.4 billion |
August 2024 | 5,227,508 | ₺3.6 trillion | ~$105.7 billion |
September 9, 2024 | 5,285,562 | ₺3.75 trillion | ~$110.8 billion |
Why it matters:
- Historical Growth: The increase marks a significant historical peak. For comparison, in June 2023, fund investors numbered 3.875 million with a portfolio size of ₺1.136 trillion (approx. $33.8 billion). By August 2024, investor numbers had risen to 5.228 million with a portfolio size of ₺3.596 trillion (approx. $105.6 billion).
- Sector Implications: Fund managers note that despite rapid growth, the portfolio size still represents only about 15% of Türkiye’s GDP, while globally, it’s over 20%. This suggests considerable growth potential for Türkiye’s investment funds.
What’s next:
- Digital transformation: Türkiye has introduced digital portfolio management services through Akbank Mobile, enabling investors to manage portfolios digitally and expand access to investment management.
- Central bank impact: Measures to withdraw excess liquidity from the market are boosting money market funds, which are now offering gross returns of 45-50%.
Key figures:
- In August 2024, the portfolio of investment funds reached ₺3.6 trillion (approximately $105.7 billion).
- On September 9, 2024, the portfolio of investment funds increased to ₺3.75 trillion (approximately $110.8 billion), with 5.286 million investors involved.
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